The insurance sector has been slammed as dysfunctional because of its lack of diversity and inclusion.
“Progress is too slow,’’ said Central Bank Deputy Governor, Ed Sibley, in a critique of insurance industry culture.
Serious gender imbalance
He pointed to a “serious gender imbalance” in the industry with low levels of women in senior leadership roles and a significant gender pay gap.
The Central Bank is continuing to push insurance firms to sustainably serve the needs of businesses and households across Ireland and beyond.
Its publication A Thematic Assessment of Diversity & Inclusion in Insurance Firms, highlights a lack of diversity and inclusion (D&I) in a sample of 11 insurance firms, including some of the largest insurers operating in Ireland.
The report analysed insurance firms’ policies, procedures and practices, as well as their approaches to monitoring progress on D&I.
Among the key findings are that most insurance entities do not have a D&I strategy and where there is one, it is not clear how this strategy is aligned to the overall company strategic objectives.
Most insurance firms are not sufficiently prioritising D&I, the Central Bank says, and the overall effectiveness of boards and senior executive teams is not sufficiently evident in senior recruitment and succession planning.
In addition, there is clear evidence of significant gender pay gaps.
While women accounted for 51% of the total workforce, they represented only 24% of top 10 earners across the sample and accounted for 34% of the upper pay quartile.
Between 2012 and 2018 only 21% of applications for senior roles submitted to the Central Bank for approval were from women.
The Central Bank has issued a Risk Mitigation Programme to each of the 11 firms requiring them to submit a detailed action plan to address the firm specific issues identified and to ensure these issues are appropriately addressed.
Deputy Governor for Prudential Regulation Ed Sibley noted: “There are clearly issues affecting the functioning of the insurance sector and the culture of firms within this sector.
Lack of progress
“While causation is difficult to determine, the lack of progress on diversity and inclusion in many insurance firms is connected to these underlying issues. Improving diversity and inclusion at senior levels can play a part in improving the culture and functioning of individual firms and the industry as a whole.”
Deputy Governor Sibley continued: “The lack of join-up between diversity and inclusion policies and decisions being taken at the most senior levels of firms is striking.
“While gender is only one aspect of diversity, it is an important and measurable one.”
He said the inadequate focus on diversity in all its forms in succession planning and the absence of plans to solve remuneration issues must be addressed.